Practice Quiz 1 on Designing Experiments
1. Why is it challenging to evaluate marketing options?
There are so many factors that influence outcomes that are impossible to anticipate.
Marketing usually occurs in isolation
Test market results are unreliable.
It’s hard to confuse correlation and causation.Correct
2. Which of the following factors is required to establish causality?
Change marketing mix –> change time sequence
Change marketing –> change sales
Change sales –> increased marketing
Change sales –> change marketingCorrect
3. If you’re implementing a before-after experiment, which of the following would you do first?
Calculate sales lift, adjusting for any differences between the test and control group.
Calculate sales in both the test and control group given existing advertising.
Show the test group the new advertising and the control group the old advertising.
Select 1000 customers with similar characteristics or in similar geographic areas.Correct
Practice Quiz 2 on Calculating Break Even and Lift
1. In an advertising experiment using before-after design, 1000 customers are randomly assigned to 3 groups. All groups are exposed to the existing advertisement for round 1 of the experiment. In round 2 of the experiment, groups 2 and 3 see the new ad while group 1 (the control) is still shown the old ad.
|
|
Control Group 1 |
Test Group 2 |
Test Group 3 |
|
Round 1 sales–old ad |
295 |
310 |
300 |
|
Round 2 sales–Group 1, old ad, Groups 2 and 3, new ad |
310 |
450 |
325 |
What is the sales lift (in units) for the new ad shown to Group 3?
5
25
15
10
2. What is the manufacturer contribution margin ($)?
|
Retail price
|
$100 |
|
Retail margin |
30% |
|
Manufacturer contribution margin |
42% |
$12.60
$70.00
$29.40
$30.00
3. A “Mom & Pop” startup wants to increase brand awareness of their delicious hot sauce. How many bottle of hot sauce do they need to sell to break even on the ad campaign?
|
Ad budget
|
$25,000 |
|
Retail price |
$4.50/bottle |
|
Retail margin |
45% |
|
Manufacturer contribution margin |
30% |
41,152
33,670
5,556
14,430
4. Calculate net lift given the following information:
123.8%
19.2%
103.4%
20.4%
Practice Quiz 3 on Projecting Lift
1. Given the data below, calculate break even units.
396,825
2,000,000
9
5.04
2. Snacker Crackers is studying the impact of a print ad campaign for their Thinminies product line.
Without the campaign, their sales in November were 100,000 boxes. With the campaign, sales in December rose to 120,000 boxes. Historically, November represents 15% of their annual sales and December represents 10%.
What is the lift for their print ad campaign?
Tip: See the “”MA Experiments Calculations”” resource.
180%
80%
20%
120%
3. Calculate December unit sales of a new toy based on the following data from a product launch test in June.
|
Test market units sold
|
250 |
|
Control % of national sales |
20% |
|
Retailer share of product sales |
35% |
|
Test % of annual sales |
7% |
|
December % of annual sales |
40% |
3,571
1,250
51,020
20,408
Week 4: Marketing Experiments Quiz
1. Why is it challenging to evaluate marketing options?
- It is hard to measure return on investment.
- Marketing decisions are usually made in isolation
- Chief marketing officers and chief financial officers don’t see things the same way.
- Marketing managers often have different opinions about the impact of alternative marketing options.
- Why is it challenging to evaluate marketing options ?
It’s easy to think marketing and sales are casual , When they may in fact be correlated.
2.Which of the following factors is required to establish causality?
Sales increase.
A competitor increased their price by the same amount as your brand.
Sales decrease.
When no changes occur in the marketing mix there is no change in sales.
2. Which of the following factors is required to establish causality?
There is no other factor that could be the cause of the increase in sales.
3. If you’re implementing a before-after experiment, which of the following would you do first?
Show the test group the new advertising and the control group the old advertising.
Calculate sales lift, adjusting for any differences between the test and control group.
Calculate sales in both the test and control group given existing advertising.
Expose both the test and control group to the old advertising.
3. If you’re implementing a before-after experiment, which of the following would you do last?
Calculate sales lift, adjusting for any differences between the test and control group.
4. In an advertising experiment using before-after design, 3000 customers are randomly assigned to 3 groups. All groups are exposed to the existing advertisement for round 1 of the experiment. In round 2, new advertisements are shown to groups 2 and 3, while group 1 continues to see the old ads.
|
|
Control Group 1 |
Test Group 2 |
Test Group 3 |
|
Round 1–old ad |
650 |
695 |
680 |
|
Round 2–Group 1, old ad, Groups 2 and 3, new ad |
630 |
660 |
740 |
What is the sales lift (in units) for the new ad shown to group 2?
–15
35
-35
30
4. In an advertising experiment using before-after design, 3000 customers are randomly assigned to 3 groups. All groups are exposed to the existing advertisement for round 1 of the experiment. In round 2, new advertisements are shown to groups 2 and 3, while group 1 continues to see the old ads.
80
5. What is the manufacturer contribution margin ($)?
|
Retail price
|
$40 |
|
Retail margin |
35% |
|
Manufacturer contribution margin |
40% |
$14
$10.40
$26
$5.60
5. What is the manufacturer contribution margin ($)?
$33.00
6. A sporting goods manufacturer is considering increasing advertising for its running shoes by $3 million.
How many additional pairs of shoes must be sold to break even on the increase in advertising spending?
|
Manufacturer selling price
|
$30 |
|
Contribution margin |
60% |
|
|
50,000
1,800,000
100,000
166,667
6. A manufacturer is considering increasing advertising spending by $4.5 million
250,000
7. Calculate net lift given the following information:
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99.90%
97.60%
-2.40%
17.40%
7. Calculate net lift given the following information:
109.50%
8. Given the data below, calculate break even units.
1,280
10,000,000
13950
7812
8. Given the data below, calculate break even units.
7,215
9. Alexander Graham Crackers is studying the impact of a social media campaign for their Smorgasbords product line. Without social media, their sales in May were 120,000 boxes. With social media, sales in June rose to 160,000 boxes. Historically, May represents 10% of their annual sales and June represents 12%.
What is the lift for their social media campaign?
33%
133%
111%
11%
9. Snacker Crackers is studying the impact of an advertising campaign for their multigrain product line. Without the ad campaign, their sales in October were 80,000 boxes. With the ad campaign, sales fell to 70,000 boxes in November. Historically, October represents 15% of their annual sales and November represents 5%.
What is the lift for their advertising campaign?
263%
10. Project unit sales based on the following data from a product launch test in April in the southeast sales region.
|
Test market units sold
|
500 |
|
Test % of the population |
10% |
|
Retailer share of product sales in the SE |
20% |
|
Test % of annual sales |
5% |
|
Retailer share of market nationally |
60% |
15,000
300,000
100,000
500,000
10. Burpease has developed a new oral medication to relieve upset stomach symptoms. Their test market was run during August and September in New York.
Test market units sold
1000
Test % of the population
10%
Retailer % of national sales
30%
August/Sept % of annual sales
15%
Fourth quarter % of sales
35%
What are the projected unit sales for the 4th quarter, assuming securing 100% distribution nationally?
77,778
